About 75% of Tesla’s Bitcoin holdings were sold
Tesla, a manufacturer of electric vehicles, disclosed its Q2 financial results on Wednesday:
As of the end of Q2, we have converted approximately 75% of our bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet.
Tesla’s Q2 financial sheet shows net digital assets of $218 million, down from $1.26 billion in the prior quarter, according to the company’s writing.
The business added that the impairment of bitcoin had an effect on its Q2 operating income compared to the prior year.
The sale of digital assets generated $936 million in revenue, according to the electric vehicle company’s statement of financial flows. Only once otherwise, in Q1 2021, did Tesla’s cash flow statement indicate sales of digital assets. At the time, the sales revenues were $272 million.
Early in 2021, Tesla invested $1.5 billion in bitcoin; since then, no more purchases have been made. The amount of Bitcoins the electric vehicle manufacturer holds was never made public. Musk did, however, suggest that Tesla possessed roughly 42K bitcoins in July of last year.
Additionally, the business accepted Bitcoin for a limited period of time until suspending it in May 2017 due to environmental concerns. Tesla informed the SEC in October of last year that it would resume accepting cryptocurrency. Tesla would restart taking bitcoin, according to Musk, after “confirmation of reasonable (around 50%) renewable energy consumption by miners with good future trend” has been made. But as of this writing, Tesla is still not taking Bitcoin.
Tesla hasn’t sold any Dogecoin, and Elon Musk says the company is “very open to increasing our Bitcoin holdings in the future.”
In a call with investors on Wednesday, Musk gave an explanation of why Tesla sold the majority of its Bitcoin.
It should be noted that we liquidated a significant portion of our bitcoin assets since we were unsure of when the Covid lockdowns in China would end. Given the unpredictability of the Covid lockdowns in China, it was crucial for us to optimize our financial position, the Tesla CEO explained, adding:
We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin. It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China. And we have not sold any of our dogecoin.
Dogecoin, a joke cryptocurrency, was never purchased by Tesla for its financial records. However, the business started taking DOGE in January for select goods. Musk has previously stated that dogecoin is better suited for payments while he views bitcoin as a store of wealth.
Tesla stated: “We may expand or decrease our ownership in digital assets at any moment based on the needs of the company and on our perception of market and environmental circumstances” in a filing with the U.S. Securities and Exchange Commission (SEC) in February. We have faith in the long-term potential of digital assets as an investment and as a convenient cash substitute.
Twitter Inc. and Musk are now engaged in court proceedings. On July 8, he formally ended the transaction after making a $44 billion bid to purchase the social networking site. After that, Twitter sued Musk in an effort to pressure him into finalizing the acquisition. October is the date chosen for the lawsuit trial.